Rupee hits record low of 56.87 against dollar

MUMBAI: The rupee plunged by 57 paise to a new record low of Rs 56.87 against the US dollar in early trade today on increased capital outflows and rising demand from importers for the American currency.

Besides, strengthening of dollar against the euro also put pressure on the local unit.

The rupee yesterday had hit all-time low of 56.57 intra-day, before the Reserve Bank intervened to help the local currency recover some ground. It had ended 15 paise down at 56.30.

Talking to ET NOW on Thursday, Raamdeo Agarwal said, "Rupee was weak because oil was very high. Now as oil is low, the rupee should become stronger. It might happen that in the next 4-6 weeks, we start seeing a little more strength in the rupee. This is because the oil import bill should logically come down."

However, the euro firmed to $1.2563 against the dollar in Tokyo morning trade from $1.2543 in New York late, while the single currency dipped to 100.62 yen from 100.68 yen.

The dollar -- which enjoyed a rally in US trade on Thursday as markets looked to safe-haven currencies -- slid to 80.09 yen from 80.26 yen in US trade.

Meanwhile, the BSE benchmark Sensex plunged by 129.23 points, or 0.76 per cent, to 16,903.33.